Budget 2024: India Trails China in Defence Spending, But Must Fill the 'Insufficient' Allocation

As India gears up for the Union Budget 2024, all eyes are on Finance Minister Nirmala Sitharaman as she prepares to announce the defence allocation on July 23. Defence spending has been a crucial element in India's strategy to bolster its military capabilities, especially in the face of rising tensions with China. The upcoming budget is expected to see a higher allocation for the defence sector, continuing the trend of previous years. However, despite these increases, India’s defence spending still pales in comparison to China's, a gap that many experts believe needs to be urgently addressed.

In the early decades post-Independence, India's primary military focus was on its neighbor, Pakistan. However, as India has grown in stature and power, China has emerged as the more formidable adversary. The skirmishes and ongoing tensions at the Line of Actual Control (LAC) and Line of Control (LOC) with China have necessitated a shift in India's defence strategy. The South China Sea's strategic importance and China's assertiveness in the region further underscore the need for India to ramp up its military preparedness.

Dr. Amit Singh, Associate Professor at the Special Centre for National Security Studies, JNU, emphasizes that India's defence budget must adapt to the rapidly changing geopolitical landscape. "China’s manoeuvring at the LAC and LOC poses significant challenges for India’s defence sector. To defend its territorial integrity, India needs a substantial increase in its defence budget," he states.

China, on the other hand, continues to prioritize its military expenditure. In March 2024, China announced a 7.2% increase in its defence budget, bringing it to Chinese Yuan (CNY) 1.66554 trillion, equivalent to USD 231.4 billion. This steady growth in military spending reflects Chairman Xi Jinping's commitment to strengthening the People's Liberation Army (PLA). Despite the economic slowdown, China has doubled its defence expenditure since 2015, a stark contrast to India's more modest increases.

In February's Interim Budget, the Modi government allocated approximately $75 billion (Rs 6.21 lakh crore) for India's Ministry of Defence, marking a 4.3% increase from the previous year. However, this amount is still seen as insufficient given the threat perception from China. Defence Minister Rajnath Singh has emphasized the need for modern equipment and stronger armed forces for India to become a developed nation by 2047, the centenary of its Independence.

Experts suggest that the Union Budget 2024 should see a significant increase in defence spending. Dr. Singh advocates for at least 25% of the central government’s total expenditure to be allocated to the defence sector. "Only with such a substantial investment can India effectively handle the threat perceptions at the LAC and LOC and safeguard its national security," he asserts.

In comparison, China's defence spending is twelve times that of Taiwan's and four times Japan's, highlighting the vast difference in military capabilities between India and China. As geopolitical tensions continue to rise, India's defence budget must not only catch up but also strategically position itself to counter any threats from its northern neighbor.

The Union Budget 2024 is expected to build on the allocations made in the Interim Budget, with a clear focus on enhancing India's military capabilities. As India navigates its complex relationship with China, bolstering its defence spending will be crucial in maintaining regional stability and safeguarding its national interests.